Why sign in to the Community?

  • Submit a question
  • Check your notifications
Sign in to the Community or Sign in to TurboTax and start working on your taxes
New Member
posted May 31, 2019 4:55:20 PM

My employer paid income tax to a state I did not live in, and won't issue a correction.

I worked for a company which is based in California, but I was based in NY (I worked remotely).  In Sept of 2013 I moved from NY to TX, but my employer kept withholding NY income tax after the move.  Between Jan to Sept 2014 this employer (which was based in CA) withheld NY state income tax even though I lived in Texas.  I left the company in Sept of 2014.  I am not sure the correct way to file this.  My prior company won't correct the W2 and now claim I never told them I moved...  Am I going to have to sue them to fix this, or is there some way I can just file my NYS tax forms and get back the taxes paid?

0 56 184562
1 Best answer
New Member
May 31, 2019 4:55:21 PM

Nonresident income is income from another state you didn't live in during the year, and includes any of the following:
  • Wages or income from a state you're not a resident of,
  • Rental income, gambling winnings, or sold a home for a profit in a state you're not a resident of,
  • S Corporation business shareholder income from a business in another state,
  • You are a partner in an out-of-state partnership,
  • You are a beneficiary of a trust or estate that has an interest in another state, or
  • Your employer withheld state tax for the wrong state. Under most circumstances, you’ll have to file a nonresident return to recover the incorrectly-withheld taxes.
    Notify your employer right away so it doesn't happen again!
Filing a Nonresident State Tax Return

Make sure you prepare all nonresident returns before your resident state return, to ensure proper calculations. Also, make sure you select the state long form(s) even if TurboTax selects the short form(s) for you.

Tip: If you are preparing a nonresident state return solely to recover tax that was withheld in error, enter 0 on the screen that asks for the income earned in that state. This will eliminate your tax liability for that state, resulting in a full refund.

If you live and work in a Reciprocal State, you may only need to complete Step 3.

  1. Prepare your federal tax return first, then as you begin each state return;
    • Your federal return data transfers into your state return, and
    • TurboTax learns that you need to file each state return.
  1. Prepare a return for the nonresident state(s). Only report the income and withholdings from that state.
  2. Prepare a return for your resident state. You will report all of your income, including income from any nonresident (or part-year) states.
  3. Take a credit for taxes paid to the nonresident state on your resident state return so that you won't get double-taxed on the same income.

TurboTax calculates the credit for you, but you must select the state's long form to get the option, even if TurboTax chooses the short form for you.

Example: if you live in Kansas but work in neighboring Missouri, you would file a nonresident Missouri return in addition to your usual (resident) Kansas return. You'd then take a credit for any taxes you paid to Missouri on your Kansas return

http://turbotax.intuit.com/support/go/GEN12109'>http://turbotax.intuit.com/support/go/GEN12109



24 Replies
New Member
May 31, 2019 4:55:21 PM

Nonresident income is income from another state you didn't live in during the year, and includes any of the following:
  • Wages or income from a state you're not a resident of,
  • Rental income, gambling winnings, or sold a home for a profit in a state you're not a resident of,
  • S Corporation business shareholder income from a business in another state,
  • You are a partner in an out-of-state partnership,
  • You are a beneficiary of a trust or estate that has an interest in another state, or
  • Your employer withheld state tax for the wrong state. Under most circumstances, you’ll have to file a nonresident return to recover the incorrectly-withheld taxes.
    Notify your employer right away so it doesn't happen again!
Filing a Nonresident State Tax Return

Make sure you prepare all nonresident returns before your resident state return, to ensure proper calculations. Also, make sure you select the state long form(s) even if TurboTax selects the short form(s) for you.

Tip: If you are preparing a nonresident state return solely to recover tax that was withheld in error, enter 0 on the screen that asks for the income earned in that state. This will eliminate your tax liability for that state, resulting in a full refund.

If you live and work in a Reciprocal State, you may only need to complete Step 3.

  1. Prepare your federal tax return first, then as you begin each state return;
    • Your federal return data transfers into your state return, and
    • TurboTax learns that you need to file each state return.
  1. Prepare a return for the nonresident state(s). Only report the income and withholdings from that state.
  2. Prepare a return for your resident state. You will report all of your income, including income from any nonresident (or part-year) states.
  3. Take a credit for taxes paid to the nonresident state on your resident state return so that you won't get double-taxed on the same income.

TurboTax calculates the credit for you, but you must select the state's long form to get the option, even if TurboTax chooses the short form for you.

Example: if you live in Kansas but work in neighboring Missouri, you would file a nonresident Missouri return in addition to your usual (resident) Kansas return. You'd then take a credit for any taxes you paid to Missouri on your Kansas return

http://turbotax.intuit.com/support/go/GEN12109'>http://turbotax.intuit.com/support/go/GEN12109



New Member
May 31, 2019 4:55:23 PM

What if I accidentally prepared my resident state first?

Level 15
May 31, 2019 4:55:24 PM

You may have to do an amended resident return if you already filed it, after you do the nonresident one.

New Member
May 31, 2019 4:55:26 PM

Also, I don't see where I can go to enter 0 for income earned in the state? Where is the income earned in the state section?

New Member
May 31, 2019 4:55:28 PM

You cannot file this way in the state of Arkansas, they have to have a corrected W-2 or a statement on a company letterhead stating the income did not belong to Arkansas and withheld taxes in error.

New Member
May 31, 2019 4:55:30 PM

I'm trying to file a non resident state income tax return from New York. My company, based in New York, took out NY state tax in error. I live year round in Tennessee. I followed the instructions of placing a zero in the NY state income section on a non resident form, which then gives me the full refund. However, when I go to transmit the return it brings up a message that the return will be rejected because my W-2 is showing NY income. Any suggestions????

New Member
May 31, 2019 4:55:31 PM

get W2 corrected from employer, thats the cleanest way. i'm in exact same situation you are in to, works and lives in TN paid NY state tax, let me also know how you resolved this situation

New Member
May 31, 2019 4:55:33 PM

delete

New Member
May 31, 2019 4:55:34 PM

Curious to see how this played out. I'm in the same boat, my company thought I still lived out of state and took over $2k worth of state taxes. I live in a state that does NOT have state taxes so  I have no way to get my $ back

New Member
Feb 6, 2020 2:18:27 PM

I live in FL but work remotely for a company in MO.  When I transferred to another department, I noticed on my first paycheck after that that they were taking out state of Missouri income tax.  Thankfully I caught it right away but now on my W-2 it is showing the state income tax that was taken out for MO.  We don't have state income tax in the state of FL.  What do I need to do to resolve this?   

 

I had a coworker who had the same problem and told me she was penalized $100 for the mistake.  Why should I be penalized for a mistake I did not make? 

Expert Alumni
Feb 6, 2020 2:48:34 PM

Each state has different rules.

 

@Marty270 @ajs1287  NY taxes all income that comes from from NY based business.

 

@kpw you should file the state return and claim a refund for the excess taken out.

 

@opsahlk, MO does not care that your income is MO based, you can file a MO return, state nothing earned there and get a refund.

New Member
Mar 8, 2020 12:21:00 PM

I had a similar issue this year.

 

I moved from NYC to NC in April of 2018. For 2019 I got two W2's. One was all NC and the other had me reported as NYC Resident only partially reporting to NYC that year. I didn't live in NY all of 2019. How do I get this corrected to all go to NC? How do I get the additional taxes that my company had me paying to NYC back?

 

I had a similar issue the year before, but that was for a partial year of NYC residency although we still never got our full refund back due to NYC.

Expert Alumni
Mar 8, 2020 2:20:53 PM

File your NYS return first as a non-resident. Make sure you indicate in MY INFO there was no residency dates. As you navigate through your NYS return, there will be a section where you will need to allocate NYS income. Since there is no income to allocate, either leave this blank or if it is asking for an entry, indicate zero. 

One note I need to mention, as you answer questions in your NYS return, it will ask you if you lived in NY. Here you would say no. Then it will ask you in the beginning of the income allocation page if your wages were earned in NY, you would also say no.

When you get to the W2 summary in your NY state return, select edit next to the W2. Next screen will say Allocate Wages to New York, here you will allocate by percentage. Indicate 0%.

New Member
Mar 11, 2020 1:02:03 PM

My legal address was in Florida but I never worked there last year.  I worked in Several states including Texas and became a legal resident of Texas in August.  My employer reported all of my wages to Florida but I never worked there.  Is this legal?

Level 15
Mar 11, 2020 1:04:42 PM


@Slclsu22 wrote:

My legal address was in Florida but I never worked there last year.  I worked in Several states including Texas and became a legal resident of Texas in August.  My employer reported all of my wages to Florida but I never worked there.  Is this legal?


Florida does not have a personal income tax so there were no Florida state taxes withheld from your wages.  Texas does not have a personal income tax so there would not be any Texas state taxes withheld from your wages.

New Member
Mar 12, 2020 10:30:14 AM

I’m sorry....I left out that I was laid off and am trying to file for unemployment in Texas but my employer sent my wages to Florida

Level 15
Mar 12, 2020 10:33:26 AM


@Slclsu22 wrote:

I’m sorry....I left out that I was laid off and am trying to file for unemployment in Texas but my employer sent my wages to Florida


Your employer would have to issue a corrected W-2 to show the wages earned in Texas.  

New Member
Mar 12, 2020 5:38:57 PM

So, I worked in several states from Jan to Nov but they are sending wages to where they claimed I lived or to the address they had on file.  I lived in hotels for almost 11 months.  I thought they were supposed to send wages to the actual states I worked in.  They claimed that they have done a w-2 correction but are saying they are claiming Florida for most of the year and Texas for 3 months since I notified them of my move.  I thought I would need to do a multistate for unemployment since I worked in multiple states.  

New Member
Mar 16, 2020 3:40:56 PM

I am in the same situation. My company didn't correct address change and withheld NY taxes for 4 months of 2019. I am using freetaxusa.com software, and on a non-resident NY return, I checked that I did NOT live in NY and entered $0 for NY wages, and all taxes that I paid appear in refund correctly (Which is great) BUT the software is NOT allowing to submit returns because I am claiming $0 for NY but my W2 shows a pretty chunk of money as NY wages in box 16. Any other ideas?

Expert Alumni
Mar 16, 2020 3:52:29 PM

You could try using TurboTax or ask your question on the Freetaxusa.com website. 

New Member
Mar 18, 2020 9:38:29 AM

What if your employer keeps taking the wrong state tax out, and refuses to stop even though you have asked several times? Can't the state department of revenue do something to help its taxpayers with this issue?

Intuit Alumni
Mar 18, 2020 9:50:11 AM

You can probably contact someone at your state Department of Revenue for advice. Please refer to the article below to contact your state.

How do I contact my state Department of Revenue? - Community

New Member
Apr 14, 2020 9:06:18 PM

I also need to file a nonresident NY return to claim taxes withheld incorrectly on my W2. I followed these instructions, making sure I listed not a resident, and allocated wages by percentage, setting it to 0% for New York. However, when I try to file, Turbo-Tax won't let me saying that my return will be rejected because the 0% allocated to New York does not match my W2. How do I file this return? I cannot mail it because NY requires returns prepared via software are e-filed.

Level 1
Apr 15, 2020 8:39:50 AM

Hi-this is our exact situation! Spouse works for NY parent company but is based in Illinois so we pay income tax here-they accidentally did NY tax for a couple of months and we are cleaning up their mistake. I followed your advice-thank you so much by the way-but when I go to transmit, it tells me that NY will reject my return since I put 0% for the income earned there.  Can you advise? I can't submit anything unless I correct this.

Is submitting Illinois and Feds an option and then just mailing the NY?